Market Pulse · August 21, 2026 · Post-Market Edition

MACRO ENVIRONMENT

The macro environment is currently leaning towards a RISK-ON stance, supported by a positive Sahm Rule reading and normal yield curve spreads (10y-2y at 0.50% and 10y-3m at 0.82%), indicating a healthy economic outlook. While CPI at 3.5% remains elevated, the “Greed” reading on the Fear & Greed Index (62) and a weakening dollar (DXY at 98.9) further encourage risk appetite. The unemployment rate holding steady at 4.1% contributes to this optimistic backdrop, despite a lack of direct Fed funds rate data.

MARKET PHASE

US equities, as represented by the S&P 500, are in a ‘BULL’ phase and are trading above their 20-day moving average, although the trend strength is currently classified as ‘Weak BULL’ with an ADX of 20.0, suggesting a lack of strong directional conviction. Cryptocurrencies, notably Bitcoin, are also exhibiting a ‘BULL’ trend and are comfortably above their 20-day moving average, also showing ‘Weak BULL’ trend strength with an ADX of 18.1. The VIX remains in a ‘Normal’ classification at 16.01, with a 7.5% increase today, hinting at a mild uptick in near-term volatility expectations.

SECTOR TRENDS

The market is experiencing a rotation favoring economic expansion themes, with Technology, Healthcare, and Energy leading the charge, reflecting strong momentum in their respective segments. Conversely, Real Estate, Utilities, and Industrials are lagging, underscoring a preference away from defensive and capital-intensive sectors. This divergence suggests investors are currently prioritizing growth-oriented and cyclical industries, aligning with the broader RISK-ON macro sentiment and potentially favoring positioning in innovation and energy transition plays.